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Thursday, January 29, 2009

First measurement about crime and police

To economists, the role of government is to deliver `public goods'. A public good is something that is non-rival and non-excludable. Something is non-rival when my consumption of it doesn't detract from your consumption of it. Non-excludability is the inability to exclude a person from benefiting from the public good.

Law and order is a public good. When a city is safe, everyone benefits: the safety that one person enjoys doesn't detract from the safety that another person enjoys. And, it isn't possible to exclude any one person from benefiting from this safety.

In recent decades, economists have pushed for greater government involvement in `human development' covering issues such as health and education. Most activities in this field are actually not public goods. The bulk of educational services and health services are private goods: I get healthier or smarter, I benefit, it is a private good. Hence, the economic logic of pushing the government into this field was always suspect [link].

In India, we have had this great government interest in human development while - at the same time - we've had a worsening of the police and judiciary. While law and order is a public good, the performance of the State in this field has been getting worse. While most of human development is not a public good, we've seen an increasing focus and resource outlay in those areas.

I find it useful to compare and contrast the judiciary against the election commission. If the election commission came to us and said that conducting a general election would take 20 years, there would be an uproar and the entire leadership of the election commission would be sacked. It has not been easy, but the election commission has figured out how to run a fairly clean general election within roughly two months. Compare and contrast this with the non-performance of the judiciary. Why are we willing to accept non-performance from the judiciary of a kind that we would never accept from the election commission? If anything, as Fareed Zakaria has emphasised, a healthy democracy is more about good courts than it is about good elections.

The challenge in India is that of reining in the State, getting it to perform on the police and judiciary, and shift the focus of the State away from the pleasures of recruiting teachers who do not teach.
One of the first pieces of work that I have seen on the police in India was done by the MIT `Poverty Action Lab', and is written up by Jacob P. Koshy in Mint [slideshow].

I was very impressed at the fact that the research involved conducting a `crime survey'. Once again, there are a zillion surveys in India on issues like poverty or health, but none on the critical business of police and judiciary. In my knowledge, this is the first survey evidence on the experience of citizens with crime and the police. In the US, such surveys are called `crime victimisation surveys'.

Here are some gems from this. There are four districts that they report (Dholpur, Kota, Chittorgarh, Jaipur) where one in ten households (or worse) reports direct experience with one crime. I'd be curious to know what comparable international values are. In districts like Udaipur, Nagaur and Barmer, this value is 5% or lower.

Only 21% of the victims reported the crime and got an FIR registered.

13% of the victims were completely satisfied and 14% of the victims were satisfied with what the police did. The remaining vast majority were unsatisfied at what the police did. This is a massive vote of no confidence in the police. A full 82% reported that no beat constable ever visits their village or neighbourhood.

The slideshow goes on into statistical measurement of a few innovations in how the police could be made to function better. As with the bulk of this `development policy through randomised evaluation' literature, I'm underwhelmed at the usefulness of such simplistic schemes for making government work better. I have worked in government, and I have worked on reforming government from outside government, and this is not the way fundamental change is achieved.

In short, I was very impressed at (a) the crime victimisation survey, which is a big step forward, and (b) the fact that more people are taking interest in the most important public good of all. All of us should be pushing the top leadership to put more time and focus and resources into true public goods (e.g. law and order) at the expense of areas which are not public goods (e.g. most of human development).

So what else is a public good. I am not sure if my reasoning against 'non-rival' nature of public goods is correct here but 1. Law and Order(security): Higher security for politicians and areas occupied by bureaucratic elite means that there is correspondingly less security in less privileged parts of the cities.2. Municipal Water Supply: One sector of a town competing against another sector for better water supply. A resident watering his lawns does affect the quality of supply for his neighbors. 3. Health: Prevention of Communicable diseases through vaccination should be a public good. Eradication of diseases like polio benefits everyone.4. Air Quality Control: While clean air benefits everyone. Its not in the interest of commuters riding shared auto-rickshaws that ply in most cities of India to shut down these heavily polluting vehicles until another public good 'public transport' is fixed.

Think of good countries where the justice system works correctly. Law and order is not as locational as you suggest. The police and courts have to work comprehensively well for enforcement is not just about a neighbourhood. Once law and order is sound comprehensively, it is non-rival and non-excludable. Putting more policemen in some enclaves does not give safety, as we know so well in India.

Water - I agree that water consumption is rival and hence is not really a public good.

Health - I agree that work on epidemiology and population-wide programs is a public good. But running PHCs or hospitals is not.

Air quality - it is a public good because it is non-rival and non-excludable. The story being told is not about who pays etc. E.g. the cost of producing law and order falls disproportionately on rich people because they pay almost all taxes. So the burden sharing of how to pay for public goods is a different story. The point is that when you see a public good, there is a case for government to be in it (in some fashion). When you see things which are private goods, government should not be producing them.

While law and order is clearly non-rival, dosen't the fact that different people enjoy its benefits differently count for even a little bit in determining public policy? For instance, someone with a greater value of physical goods in his house would stand to gain much more from it than, say, someone who is very poor and stands to lose little in the event of a robbery and who is in any case less prone to being robbed.

If even one of the stated aims of public policy is to maximize the common good, it is definitely arguable that in a country like India, bad quality education provided by the government is preferable to excellent quality law and order, were both achievable with the same outlay.

I am not stating that this is indeed the case -- in fact, it almost surely is not. What I'm objecting to is the argument that since X is public good and Y is clearly a private good, the government should automatically give higher priority to X and make every effort to get out of Y.

Harikrishna, You are curious about interesting and important questions. May I suggest a book or two in public economics?

It sounds counter-intuitive, but it's true. The case for government production is clear for public goods and not for private goods. And then, separately, comes the question of what is the best way to finance public goods. This leads to the subject of tax policy. Optimal tax policy is not based on individual preferences - e.g. you might like clean air more than me, but that doesn't mean you should be charged a higher income tax.

Gaurav, most of those surveys are of bad quality and the data is not to be trusted. The gold standard is `National Family and Health Survey' (NFHS). The dataset is available for free but (sadly) you have to jump some hoops.

Thanks Ajay. There's such a dearth of good statistical information in India (at least information that's easily accessible to a layman) that your phrase grabbed by interest immediately. Got to mention that I like your commentary and am a regular visitor to your site. I am an engineer by training but over the years I have developed an interest in economics and I have started following a couple of economics/finance blogs along with boning up on some classic economics texts.

Ajay you hit the bull's eye. Interestingly, two important explaination i can put forward for under provsioning of polocing and judiciary in India.One- the expenditure on these services is regarded as non-developmental and non- planned.In case of hike in expenditure by the governemnt on police and judiciary, the press will report that unproductive expenditure is increased by the governemnt.but second explaination takes care of the why the classification is as it is- thta is self serving politicians are haapy offering public a welfare schemes that basically fills their own pockets, and without efficient police and judicary they can always get away with their accounatbility. Is it a wonder that despite so much hue and cry in Ruchika case, no the government has not shown any sign to reform the police?well, almost all governemnt institutions are run like fiefdom by the few, no measure of reform can do the trick. want to know why? because head of institutions in collission with the politicians, simply ignore the rules, twist the rules, break the rules, and whistle blowers are put to hardships, as court of law is known to be of no use. QED. nkb

I fully agree with you that democracy is possible with good courts and police rather than only elections. Police and judiciary work under the political pressure and only please politicians. Very nice blog.

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